TDC plays the numbers game awfully fast and loose
Mr Lam [Trade Development Council executive director Fred Lam] was particularly proud of the TDC's financial responsibility over the 2006-2007 annual report's fiscal year ... Revenue was up HK$165 million over the previous year, helping the TDC become increasingly self-reliant. 'For every HK$100 the TDC spends promoting Hong Kong's trade,' said Mr Lam, 'we now generate more than HK$86 ourselves.'
TDC news release
Isee that it's fast-and-loose-with-numbers week again at the TDC. It is most weeks, of course, but the shills have really outdone themselves this time in ballyhooing the latest annual report.
The background here is that the TDC relies on a regular infusion of cash from the government through what is called the Trade Declaration Charge.
This is a particularly nasty little tax levied on every export from or through Hong Kong. It amounts to only a fraction of a fraction in percentage terms but it is a big administrative headache for trading companies because of a special but clumsy computer payment mechanism.
Not all of the proceeds now go to fund the TDC. The subsidy was frozen two years ago at HK$341 million and the rest is kept for the general public purse.
Thus, note that when Mr Lam is 'particularly proud of the TDC's financial responsibility' and boasts of 'helping the TDC become increasingly self-reliant', he doesn't mean that he is taking a smaller subsidy from public revenues. He means only that he is spending more and thus the subsidy looks smaller in proportion.
But he can't even get this right. The subsidy is HK$341 million and the annual report gives total TDC expenditure as HK$1.8 billion. I make that as HK$19 out of HK$100 from the subsidy which means that the TDC itself generates HK$81 out of HK$100, not Mr Lam's HK$86.
Do you think it possible, Sir, that calculators are among the products the TDC promotes? If so, break open a crate and treat yourself to one. You may find it useful.
There is another little secret in the accounts, which the shills have not bothered to mention. The TDC can actually afford to see the subsidy reduced. It enjoyed a surplus last year of HK$127 million and quietly shoved the extra money into a kitty for capital works.
This leads to an obvious suggestion. Let's give Mr Lam grounds to be extra particularly proud. Let's make the TDC not just 'increasingly' but completely self-reliant. Let's end the subsidy right now and then we can abolish that niggling trade declaration charge.
The next step will be to make the TDC not just completely but totally self-reliant.
Well, you didn't really think, did you, that HK$341 million was the only subsidy the TDC receives? How silly. Just suggest that we charge it the full going market rate for the use of the Convention and Exhibition Centre and you will discover that the more hidden subsidy is also much bigger.
And why not charge the full rate? The TDC was set up to promote Hong Kong export wares but there are effectively none left to promote, only mainland-made ones and there is really no value added that it can provide to our service industries. It can't teach bankers to bank, for instance.
I have said this before but it needs saying again. The TDC has passed its sell-by date. There is no reason to give it a subsidy at all any longer. If the trade fairs that it organises are really going 'from strength to strength', as it claims, then they should be able to pay for themselves. Let's put it to the test and see how strong this strength really is.
But, getting back to the game of fast and loose with numbers, it appears that TDC chairman Peter Woo Kwong-ching likes to play too.
In that same news release, he is quoted as claiming that manufacturing and trade activities 'now account for approximately 45 per cent of GDP and 1.3 million jobs in Hong Kong'.
I checked with the official government statistics and they show that manufacturing plus import and export trade account for about 27 per cent of GDP at present, not 45 per cent, and that they employ about 750,000 people, not 1.3 million.
Of course, we can always modify what we mean by 'trade activities' if we choose. Mr Woo obviously did. Just a little stre-e-e-e-e-e-e-tch, you know.
He also says that total trade last year 'surged past the HK$5 trillion mark for the first time in history'. In fact, it did this in mid-2005. Total trade is now running at more than HK$6 trillion a year.
But Mr Woo completely ignores the lucrative trade in services on which our economy is increasingly built. His figure incorporates only trade in goods. The TDC doesn't understand the service trades and is not involved in them. Thus, services just drop right off the TDC radar screen.
What he also ignores is that about 95 per cent of our trade in goods consists of re-exports, which ought to mean that there is some value added in Hong Kong, except, of course, that the only value added here is to the price tag. It's a mainland tax dodge.
Meanwhile, domestic exports, the goods that Hong Kong does really manufacture and sell abroad, now stand at a 23-year low.
'Surged,' you see.